Sli Mag

How to Sell on Amazon

Home / Marketing / How to Sell on Amazon

How to Sell on Amazon

Amazon.com is an e-commerce and cloud computing business that was founded in the mid-1990s by Jeff Bezos and is based in Seattle, Washington. The organization holds the number one position as the largest internet retailer in the world in terms of revenue. Part of the online marketplace’s success is that the company provides other businesses with the ability to sell via the Amazon platform, thus extending the reach of any businesses wanting access to hundreds of millions of buyers that frequent the site, including the 100 million Amazon Prime subscribers. Therefore, Amazon.com is the perfect partner for individuals wishing to open their own business and sell online.

The first step in selling anything online is to source a product. This is a critical step as sellers need to understand the cost associated with the entire process. To be profitable, products need to be sold at a price that covers all costs and leaves room for a profit. In general, Amazon charges 15% commission on most categories. Commission for some categories varies; however, factoring said rate guarantees that the maximum commission amount can be covered. Additionally, the cost of the item sold, shipping, and operating expenses need to be covered as well. Therefore, sellers need to look for products with enough margin.  

One of the most profitable strategies to sell products online is to source Amazon returns pallets for sale. These pallets contain products that customers have returned to the online retailer. This type of inventory has a few advantages including having a product that has already been sold in Amazon; meaning, there is no question whether it has a potential to be sold online. Secondly, the pallets are priced well below retail, providing the buyer with enough room to make a profit. The popularity of products included in the purchase and the price of the pallets simplify the sourcing of products to sell on Amazon. However, some drawbacks do exist. For example, the items are products that have been returned to Amazon; therefore, some of the items may not be in working condition. The merchandise is in an untested condition and is sold as is, indicating that the risk of buying damaged items lies solely on the buyer. For the most part, enough of the items will be in operational condition and can be listed as open box or used. Sellers can also research popular products or categories and sell such items directly on Amazon. For example, workout and fitness products are currently in high demand. Sellers can look for high-value items nutrition products such as those sold on NetNutri and expand the reach of the product by listing the item in popular marketplaces.

Once sellers have obtained a product source, they can open an Amazon Seller Account. Amazon provides users with two type of seller accounts. The first is an Individual Seller Account which does not have a monthly subscription costs but charges 99 cents per listed item, with a maximum of 40 items per month. The account limits a seller’s ability to add new items to the Amazon product database and does not allow items to be eligible for the Buy Box or other Amazon features. However, if sellers are just starting out and want to test the market, this type of account may provide a good foundation.

Alternatively, professional sellers can subscribe to the Amazon Pro Seller account, which has a monthly subscription fee of $39.99 but does not have any of the limits imposed on the Individual Seller Account. For professional sellers, this type of account will be necessary as the item limitation is too limiting and it is necessary to be able to add items to the Amazon Product database. Furthermore, the advantage of having the product listed in the Buy Box and the bulk uploading of inventory are features necessary to running a successful Amazon business. Once the account is set, users are ready to start selling merchandise on Amazon. Sellers should monitor pricing regularly and use the features provided by Amazon to ensure that the listing is competitive and profitable.